ECONOMY: Cyprus loses halloumi trademark in the UK

Cyprus has lost its halloumi trademark for the UK due to a blunder in the Ministry of Commerce as it failed to respond to a British court’s calls to state its case in a trademark legal battle.

The Ministry of Commerce failed to respond to the claims of British company John & Pascalis Ltd contesting the ownership of the halloumi trademark.

Failure to make its case, allowed the court to award the firm the trademark. The final blow came on 28 November when the court rejected an appeal put forward by the Ministry, stating that the documents supporting Cyprus’ case were filed with great delay.

“This development, although not visible now, may endanger our future Halloumi exports to the UK,” said the President of the Cyprus Dairy Producers’ Association, George Petrou who stressed that this may lead to a complete catastrophe if all stakeholders don’t pull together to face the issue.

“What this means is that it may be possible for someone in the future to produce any cheese product they like and label it as Halloumi,” said Petrou.

He argued that Cyprus had two tools to protect Halloumi exports to the UK, the Halloumi European Trademark and the UK trademark, which complimented each other.

“Because of wrongdoings from the ministry we are left with just one, the European trademark,” said Petrou.

He is sceptical over whether the European trademark alone will suffice to protect the country’s Halloumi exports to the UK.

“Let us not forget that exports to the UK amount to 40% of all our Halloumi exports, bringing in more than EUR 80 mln to the country’s economy,” said Petrou.

The trademark registration in Britain also enhanced the case for Cyprus’ Product of Designated Origin (PDO) file with the European Commission.

Petrou stressed that the loss of the UK trademark definitely weakens the position of the dairy producers in Cyprus.

He said that despite the obvious blunders made by the ministry, Petrou feels that the company which challenged the trademark ownership of Cyprus intended to damage to the PDO file as submitted to the EU.

The firm that challenged the trademark ownership of Halloumi is the biggest importer of the Cypriot cheese to the UK.

“With the approval of the PDO file, products such as Chilli flavoured Halloumi, Halloumi blocks weighing over 300g and other byproducts will not be eligible to be labelled as traditional Halloumi. Their aim is to have these types of products included in the file,” said Petrou.

The Dairy Producers Association would also like to see the PDO file altered to include these products, but the actions of the UK company may endanger the future of Halloumi exports.

“We need to sit down and find a way to register Halloumi as a PDO with the European Commission in a way which will be to the benefit of everyone and the country. If we don’t pull together, we risk losing everything we have built over the past decades,” Petrou said.

The sticking point of the PDO file is that currently, producers make halloumi with a ratio of 80%-20% of cow’s to goat or sheep’s milk, while the description of the file says that halloumi should be produced with a minimum of 51% goat or sheep’s milk as of 2024.

An issue which puts pressure on dairy producers as goat and sheep milk is already scarce.

Petrou suggested that one way out of the Halloumi maze is for the rubbery cheese to be registered as a Protected Geographical Indication (PGI) not a PDO.

The difference between the two is that qualities and properties of PDO products are exclusively determined by the geographical environment, while the main factor for PGI products is a certain quality of feature that is attributable to its geographical origin.

Cyprus’ deputy government spokesman Klelia Vasiliou, stated that the cabinet has been informed by the Minister of Commerce on the loss of the trademark and is aware that the ministry has ordered a probe of events leading to the loss of the trademark.

The Ministry of Commerce in an announcement said it is currently handling 79 cases involving illegal use of the Halloumi trademark and has successfully dealt with another 64, but acknowledged it mishandled the UK case.

“Within this framework, the competent Service did not respond in time to the United Kingdom trademark case, there is a disciplinary investigation into who’s responsible. The findings will then be forwarded to the Attorney General for the appropriate action,” said the Ministry.

The ministry is considering legal action, a difficult task as the decision on 28 November regarded an appeal by the ministry, with the court ruling that Cyprus was too late in presenting the file that had been requested four times.

However, the competent authorities do not seem particularly alarmed as they believe that the European Trademark of Halloumi registered to Cyprus will suffice to go after any private non-Cypriot firm which is not registered and is producing Halloumi.

“Of course, the loss of the trademark in the UK is a negative development, but that does not change the fact that no one can produce Halloumi outside Cyprus and without conforming to the prototype, “said Nelli Koulia, head of the Ministry’s trade department.

She said that the EU Trademark allows Cyprus to go after rogue Halloumi producers “with all our legal weapons”.

She added that the Ministry is not worried about complications that may arise because of Brexit.

The Ministry says there is a special clause in the withdrawal agreement between Britain and the European Union which states that Halloumi’s European Trademark is to automatically be adopted by Britain as a local trademark. But the withdrawal agreement is subject to the approval of the British parliament.

How the Trademark was lost

Events started unfolding in late December 2017, when John & Pascalis Ltd made three separate claims to courts in Britain to cancel or withdraw the trademark vested to Cyprus. Britain’s IPO (Intellectual Property Office) informed the Ministry of Commerce that the relevant applications had been submitted, while in a letter sent to the Ministry dated 26 January 2018, explained that the ministry had two months to reply to the company’s claims.

The IPO had made it clear that if a reply is not filed within the given time limit, the trademark would be declared invalid. The evidence from the ministry shows that the letter was received by the ministry on 9 February and officials were instructed to send the letter to the Legal Service. This was never done, so no reply was submitted to the British courts.

Another letter followed on 5 April 2018, explaining that without a reply, the award of the trademark would be considered void. Any disagreements should also be given in writing and a hearing should have been requested before 19 April. The ministry received the letter on April 26th and was forwarded to the competent office on 9 May.

As no reply was submitted, the trademark registration was declared void and a deletion was requested from the registry. Following the developments, the Ministry filed an appeal on 30 May for the annulment of the decision and additional information was provided on 18 July for the non-completion of the reply.

Despite the submission of the appeal and explanations provided, the IPO's lawyers presented many examples of companies that lost similar cases due to bad handling, leading the court to reject the application and Cyprus losing its Halloumi trademark in the UK.